NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD
NIFTY FUTURE:
One more day of up move with higher top and higher bottom with Nifty Future going right up to the channel top indicated yesterday (at 5270) where it has made a top of 5272 and closed at 5262 - once again close to the high of the day. The way US & Europe are trading at the time of writing this post, there is every possibility of Nifty Future opening with a gap and take the market above the channel after over a year. Needless to say that it is a bullish sign and should not be ignore.
While the charts are indicating all positive factors, common sense and the impending Gann turn date on 4th Feb suggests that the top may be near. In light of this contradiction, I would like to err on the side of caution, by suggesting not to create fresh long position and be on the side for the next two days.
I would not even advise fresh short position unless Nifty Future gets back inside the channel at 5270. If that happens, one can go short with stop loss of 5300. Safer would be to consider going short only when Nifty Future breaks 5165 with stop loss of 5200.
Please do not force your bearish view unless market shows some sign of tiring. Until then caution is advised.
One strategy that can be considered in the current circumstances is buying 5500 Call (Rs. 25) and 5000 Put (Rs. 30). With a total cost of Rs. 55/- you have the position for the better part of the month and would be a view neutral idea. You can benefit in case there is a big move on either side. Make sure you don't buy just one side and try to save the cost of the other side.
Please do not trade without STOP LOSS.
With Best Wishes,
Ketan Asher.
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